Japanese chip-maker Renesas Electronics will soon announce an ambitious restructuring plan in exchange for financial support worth of Y100 billion from its shareholders and four banks, according to sources close to the company.
Renesas will cut 12,000 jobs and shut down half of its domestic plans, to focus on its core business – and currently the only one still profitable – of making chips used in cars, the sources say.
Renesas may need around Y300 billion, including the 100 billion yen for its restructuring, shut down its system chip facilities and invest in new infrastructure, according to Katsuhide Takahashi, a top manager at Citigroup.
“There is no guarantee that there won’t be a cash crunch three or six months from now,” he said.
“This is Renesas’ last chance and everyone knows it,” said a Japanese chip executive who declined to be named, referring to the restructuring plan.
Renesas Electronics, the world’s fifth largest chip-maker, was founded in 2010 as a joint-venture of three major chip businesses of NEC, Mitsubishi Electric and Hitachi.